Sticking with the leaders

McIntyre Global manager likes JP Morgan, LSI, Park Place

LOS ANGELES (CBS.MW) -- Tom McIntyre's practice of picking the leaders in industries that play a major role in domestic economies has served his fund well in the last few months.

That includes big companies like Citigroup
C, +1.23%
GlaxoSmithKline
GSK, +0.08%
and Swiss-based Novartis
NVS, -0.36%
These stocks also fall into McIntyre's preference for sticking to industries he understands, including finance, pharmaceuticals and telecommunications.

Holding on to stocks like Citigroup, which has rebounded from its lows, has served his McIntyre Global Equity fund well. "We're long-term holders," he says.

That banking giant, along with JP Morgan
JPM, +0.67%
Merrill Lynch
MER, -1.13%
and Cendant
CD, +10.53%
-- all holdings in his fund -- has seen new 52-week highs. McIntyre also bought Best Buy
BB, -0.68%
last fall at $20 a share; the stock has since more than doubled.

McIntyre has solely managed the Global Equity portfolio
DGLEX
since May 1997. To be sure, the no-load fund has since had its share of ups and downs. Year-to-date, it's up 52 percent, handily beating an 18.5 percent return for the S&P 500. On a three-year basis, the fund is down nearly 20 percent, trailing an 8.7 percent loss for the S&P. The fund has an expense ratio of 1.77 percent.

"We've had a good bounce back in the last 12 to 13 months ... so we're quite excited," McIntyre says. "More importantly, we're of the view that more and more people are coming to the idea that the global economy should kick in with a much higher growth rate."

But McIntyre admits that the strong performance of his fund makes him a bit nervous.

"I'm also the largest shareholder of the fund, holding 3.5 percent to 4 percent personally," he says. "I've never sold a share ... and I continue to add to holdings."

Three stocks McIntyre likes now include JP Morgan, which on Oct. 22 reported third-quarter net income of $1.63 billion, or 78 cents a share, beating average analyst expectations. Revenues fell short of expectations slightly, which put pressure on the stock.

"They're a little cheaper and I think people are a little more skeptical of them still," McIntyre says. "Our fund has been holding them for some time." Shares of JP Morgan gained 60 cents Tuesday to close at $35.55.

Next up is LSI Logic
LSI, +0.41%
which designs and manufactures high-performance integrated circuits and storage systems. McIntyre says the company is enjoying a related rise in demand for digital gadgetry. "LSI is heavily involved in the consumer electronics area," he explains. The stock closed Tuesday at $9.20.

Finally, McIntyre singles out Park Place Entertainment
PPE, +16.25%
a gaming industry leader he owns on a valuation basis.

"The company is trying to pay down some debt, do some expansion and there are opportunities coming up," he says, noting that the U.K. is expected to allow more casino gambling.

"This represents a potentially big opportunity for major gaming operators in the U.S.," McIntyre adds. "Park Place has lagged the group, which is why we like it."

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